HomeSource had offered to split state funds with the private school in a deal where students would be registered through HomeSource but taking classes at Sudbury, an arrangement that Bethel alleged was a violation of the charter contract.

Bethel Superintendent Colt Gill filed a complaint with the Oregon Teacher Standards and Practices Commission against HomeSource Executive Director Paula Praus-Williamson, and she took heat from her own board of directors for failing to consult with them.

The charter school sought the talks that led to a settlement, officials on both sides said.

"We decided it would be best to come to an agreement amicable to all sides," said Ward Christman, chairman of the charter school board.

Under the deal, HomeSource will be permitted to operate through June 30. It agrees to drop its appeals, and Bethel agrees not to take further action through any state agencies. HomeSource has severed its relationship with the private school.

Before it was a charter school, HomeSource provided educational and instructional support to families that were home-schooling their children.